Binance Coin has more utility within the Binance ecosystem than it does sitting in a wallet. If you are an active trader or investor using the Binance exchange, you want to keep your BNB on the platform. BNB may have been created as an incentive for the token sale, but since its launch in mid-2017, the token has evolved and grown to take up more roles. It has many more uses than just offering discount benefits to its holders.
Uses for Binance Coin Explained
In September 2020, Binance launched a ‘better’ version of Binance Chain with smart contract functionality dubbed the Binance Smart Chain (BSC). The BSC is a parallel blockchain with exact comparison to the popular Ethereum blockchain. It even shares a codebase and maintains compatibility for decentralized applications (dApps) running on the Ethereum Virtual Machine (EVM). BNB was initially created to serve as a utility token within the Binance exchange.
An exchange with a quiet orderbook is not a good place to invest your money. However, Binance has the busiest orderbook in the world, making it a safe, competitive market for transactions. Binance’s major innovation is their matching engine, capable of 1.4 million trades per second. This makes their trading platform one of the fastest available on the market. As such, many crypto investors have flocked to Binance for its processing speed. On a final note, Binance has a mechanism that ensures BNB will appreciate in value by making them scarce.
What is BNB Used For?
The withdrawal fees vary by the coin, but they are flat fees, not percentage-based. Expanding out further with other exchanges, Binance made a deal with Crypto.com. This exchange made a deal with credit card companies to issue credit cards backed up by crypto assets. In turn, Binance saw this as an opportunity for Crypto.com to include BNB as a what is a controller job salary form of payment for credit card bills.
How Many BNB Are There in Circulation?
It does this by quarterly burnings, as explained in the official Binance whitepaper. Burning tokens just means removing them from circulation, so they form a more scarce pool. With the BNB ICO launch, Binance distributed 10% (20 million BNB) of the tokens, at $0.15 each, to so-called angel investors. These are private, wealthy individuals who provide companies with enough seed money to fully develop their business roadmap. Binance retained 40% (80 million BNB) of tokens for itself, which left 50% of the remaining BNB supply to the public.
- BNB was originally issued as an ERC-20 token, running on the Ethereum network, with a total supply of 200 million coins.
- The first phase happened between the 1st and 7th and saw the sale of BNB tokens at 2,700 tokens to 1 ETH coin.
- It is, however, important to differentiate between each to avoid losing your tokens between transfers.
- However, we’ll see in a minute that Binance makes it possible to reduce these transaction fees.
- Therefore, if you trade a lot on Binance, you should consider getting BNB and using them to pay for your fees.
Solving some technical problems with exchange software is among Binance’s key competitive advantages. After all, Bitcoin became so valuable because of its finite limit at only 21 million BTC. By the same token, when the Federal Reserve increased the USD money supply by trillions, it greatly devalued the dollar, causing a 40-year-high inflation. It just goes to show that, more often than not, entrusting your money to companies is a better bet than in governments. Likewise, online merchants can opt to choose BNB to pay for their services. This ranges from booking hotels and flights to paying for lottery tickets and gifts.
When an exchange matches buy/sell orders and completes a trade, it charges a transaction fee to both parties for the service of finding a match. Outside of that, BNB is just like all other cryptocurrencies on other blockchains. You can exchange BNB for any other token available on the Binance exchange. Furthermore, the company incentivizes you to hold BNB because it gives you a discount when you pay your transfer/exchange fees in BNB instead of other currencies.
Most cryptocurrency projects, including Binance, periodically burn coins to sustain the value of their digital asset and create a deflationary effect. She started her career as a TV anchor and presenter on China Travel TV in 2012. Later, in 2014, Yi co-founded OKCoin, which was the largest fiat-to-crypto exchange in China at the time. In 2017, she joined forces with Changpeng Zhao, and together they created the largest crypto exchange globally — Binance. Whether or not BNB is a good investment depends on your investing goals.
Therefore, if you had been a Binance investor with just a $1,000 worth in BNB, you would now be able to turn that one grand into $2.5 million. A marketplace for cryptocurrencies where users can buy and sell coins. The token sale offered 100,000,000 units of BNB (50% of the total supply). The issue price was 1 ETH for 2,700 BNB or 1 BTC for 20,000 BNB (around 0.11 USD back then).
Following the proposal, gas fees on Binance Smart Chain have become even lower, as the network burns a part of the fees to decentralize further. Your BNB tokens will be deposited to your Binance ‘Fiat & Spot’ wallet as soon as the transaction is processed. If this is your first time using Binance to buy crypto, you will be required to add a credit or debit card to your account.
However, in the future, it’s possible the value of BNB could grow as an asset. For the earliest investors, they’ve already seen a large return on BNB. It’ll be interesting to see if investors continue to take the rebate or hold BNB in hopes that it will appreciate. It can also be used to purchase goods and services at participating vendors. Initially, the BNB started as a traditional ERC-20 token on the Ethereum blockchain.
How Much Is BNB Worth?
Even in the current bear market users continue to sign up with the exchange. Binance was one of the first exchanges to reactivate user registrations at the peak of the 2017 bull market. Binance coin (BNB) is the exchange token of the Binance crypto exchange. That means demand for the token is linked to demand for the exchange’s services. On Binance’s trading platform alone, approximately two million users have used BNB to pay for trading fees totaling more than 40 million BNB on more than 127 billion trades. Aside from being the largest cryptocurrency exchange globally, Binance has launched a whole ecosystem of functionalities for its users.